Blog
Procurement negotiation – Is your approach any good?
By Mark Hubbard |
At this time of year, you may be saying to yourself “I’m going to be a better negotiator in 2020”.
To help you achieve that, here are the five conversations you can have with yourself to achieve your goal with our latest blog Is your procurement negotiation approach any good?
1. I will represent the business
There is a great danger in negotiations that I represent the procurement organisation rather than representing the business. Of course, I work for procurement, but I am trying to deliver results for the business. If l represent procurement, then other people must be representing other parts of the organisation which means that there must be multiple parts of the negotiations happening with the risk of incoherence and a lack of joined-up thinking. This year I will work to ensure that in any negotiation, I am working as the lead negotiator and I am coordinating all of the elements of the negotiation for the business.
2. I will understand The Negotiables
There are often a host of different things being negotiated in a single negotiation, and their relevance, interplay and value are often obscured. Even worse, different parts of the organisation have different views about what is important. By bringing together a coherent picture of the areas being negotiated and managing that to ensure there is agreement on this in the organisation, I will deliver more effective and coherent negotiation outcomes.
3. I will manage my stakeholders
All my negotiations have a range of stakeholders involved with different expectations and outcomes required of the negotiations going on. Equally, they all have different levels of interest and engagement with negotiations, and different ways of communicating. I will work to ensure that for any negotiation, I have an appropriate level of engagement with the stakeholders so I understand both what they need and how to manage outcomes appropriately.
4. I will understand the other side’s motives and interests
It is easy to get too focused on our own areas of outcome and forget that the other side has interests as well. If I can explore and build a deeper understanding of what is important to the other side of the negotiation, I may find areas of opportunity which are both good for me and easy for the supplier to provide. Where we can find mutually beneficial areas outside of the obvious commercial discussions, we can deliver greater value overall. Within this, I need to link back to my own side’s activity, where our ability to deliver particular elements is critical to maintain our own credibility.
5. I will seek feedback
The whole skill set around negotiation is one in which I need to develop and build my capability, as I deliver so much through it. To improve, I will seek regular feedback from people I value in this area to make sure I can identify opportunities for improvement. Further, I will design some negotiations to have another skilled negotiator with me so I can use their observations and feedback to build a better picture of the changes and improvements I can make.
If I focus in these 5 areas, I am likely to get better results from my negotiations, all without costing a huge amount of time and resource. If I plan my negotiations with these areas in mind, I’ll get to a better result.
Thanks for reading “Is your procurement negotiation approach any good”
To find out more about negotiation, download our negotiation advantage overview.
Further reading
Blog post: How personality affects your Procurement Negotiations
Blog post: A negotiation fundamental – Understanding the suppliers interests
About Mark Hubbard
Director
30+ years experience in procurement and supplier management, in line and consulting roles
Previous employment: Positive Purchasing Ltd, SITA,
QP Group, BMW, SWWS, Rover
Education: BSc in Engineering Metallurgy, MBA University of Plymouth
CIPS: Member
